As of January 15, 2012 Crackle, Inc. 10202 W. Washington Blvd. Culver City, CA 90232 Re: Content License (Spanish/Portuguese Language Territories) Ladies/Gentlemen: This letter shall confirm the agreement (the Agreement ) between CPT Holdings, Inc. ( Licensor ) and Crackle, Inc. ( Licensee ) whereby, subject to the terms of this Agreement, Licensor will license to Licensee the audiovisual content owned or controlled by Licensor that is (i) in the categories set forth in Exhibit 1 attached hereto or (ii) in such other mutually approved Exhibits as are applicable (collectively, the Content, and each item thereof, a Program ). 1. License. For good and valuable consideration, the receipt of which is hereby acknowledged, Licensor hereby grants to Licensee the non-exclusive right and license to exhibit and authorize the exhibition of the Content, during the License Period specified by Licensor for each Program, via Authorized Delivery in the Authorized Format in the Licensed Languages, in the Territory, on a Free-On-Demand basis only (a) on the website currently branded Crackle and located at www.crackle.com and any successor versions thereof that are wholly-owned and operated by Licensee (including the functionality allowing individual users, by means of independent action, to virally syndicate the Crackle video player and the Content displayed therein elsewhere on the Internet for personal, non-commercial use (e.g., as part of such user s blog or personal profile page on a social networking site)), (b) within the Crackle video player syndicated and/or subdistributed on third party websites, whereby the Content is hosted and served by Licensee but displayed on a player that appears on a site other than Crackle.com, subject to the terms and conditions of this Agreement and (c) on third-party video distribution services in the Territory approved by Licensor in writing, subject to the terms and conditions of this Agreement. With respect to categories (b) and (c) above, Licensor reserves the right to provide Licensee with a list of sites or subdistribution outlets through which Licensee may not exercise the rights granted hereunder. For the avoidance of doubt, Licensee shall have the right to reproduce, store, cache and exhibit the Content solely to the extent necessary for its exploitation of the rights granted to it under this Agreement.
Page 2 1.1. Territory means Mexico and its territories, commonwealths, possessions and trusteeships and all countries, territories, commonwealths, possessions and trusteeships within: (A) Central America (including, without limitation: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama), (B) South America, including, without limitation: Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay, Dominica, Dominican Republic, and Venezuela), and (C) the Caribbean Basin Islands (excluding Bermuda, Puerto Rico and the U.S. Virgin Islands, but including, without limitation: Anguilla, Antigua & Barbuda, Aruba, Barbados, Bahamas, Bonaire, the British Virgin Islands, the Cayman Islands, Curaçao, Eustatius, Grenada, Guadeloupe, Haiti, Jamaica, Martinique, Montserrat, Saba, Saint Barthélemy, St. Kitts & Nevis, St. Lucia, Saint Maarten, St. Martin, St. Vincent and the Grenadines, Trinidad, Tobago and the Turks and Caicos Islands). 1.2. Authorized Delivery means delivery via (i) the open Internet on a streaming and/or progressive download basis and (ii) mobile cellular networks on a streaming basis. 1.3. Authorized Format means a digital electronic audiovisual file in standard definition in Flash (version 9) or Windows Media formats, unless otherwise agreed by Licensor in writing. 1.4 Free-On-Demand means exhibition of a Program to a viewer (i) for which the viewer pays no fees or charges for the privilege of viewing such exhibition; (ii) which exhibition may be initiated (and/or terminated or paused by) the viewer in the viewer s discretion; and (iii) which exhibition may be supported by advertising. Free-On- Demand shall not include paid subscription, pay-per-view or digital/electronic sale/sellthrough. 1.5 Licensed Languages means the original language of each Program and, to the extent available, subtitles and dubbed versions in Spanish and Portuguese. 2. Reservation or Rights. All licenses, rights and interests of Licensor not specifically granted to Licensee hereunder shall be reserved by and for Licensor. Without limiting the generality of the foregoing, Licensor reserves all copyrights and other rights in the images, and sound embodied in the Content. 3. Certain Limitations. Licensee shall not (i) edit, modify or otherwise alter the Content (except as provided by Section 6); (ii) up-convert the quality or resolution of the Content beyond that of the Content as provided to Licensee by Licensor; or (iii) transcode the Content into any format that is not authorized by Licensor. Unless otherwise authorized by Licensor in writing, Licensee may exhibit and authorize the exhibition of the Content only in standard definition resolution (i.e., a resolution less than 720p). 4. Availability Notices. Licensor shall advise Licensee in writing the Programs that Licensee may exploit pursuant to this Agreement, along with the License Period for each applicable Program (each such notice being an Availability Notice ). Each Availability Notice shall specify, for each item of Content captured by such Availability Notice, (i) the date on which such item of content may initially be exhibited hereunder (the Availability Date ) and (ii) the time period during which such item of content may be exhibited hereunder (the License Period ).
Page 3 Unless otherwise specified by Licensor in writing in an Availability Notice or otherwise, Licensee may distribute the Programs only on a Free-On-Demand basis. 5. Term. The term of this Agreement ( Term ) shall commence on the effective date of this letter and shall expire upon the later of (a) the first anniversary of such effective date, provided that the Term shall automatically be extended for additional, successive one-month periods unless one party gives the other party written notice of non-extension at least thirty (30) days in advance of such non-extension or (b) the expiration of the latest ending License Period. 6. Advertising. Licensee and its subdistributors (and third party advertising representatives retained by Licensee or such subdistributors) may insert advertising in the Content in a manner determined by Licensee in its sole discretion; provided however that Licensor reserves the right to provide Licensee with specific advertising guidelines and restrictions, which may include guidelines and restrictions applicable to particular categories of content (such as feature films). If Licensor delivers Content with pre-designated commercial break points, Licensee shall use reasonable efforts to insert advertisements within such commercial breaks if Licensee or its subdistributors are displaying mid-roll or interstitial advertising. 7. Ad Sales, License Fees; Payments. Licensee and its subdistributors (and third party advertising representatives retained by Licensee or such subdistributors) shall have the right to sell advertising against the Content. 7.1 Advertising Revenues. With respect to the exhibition of Content pursuant to subsection 1(a) above, Licensee shall retain forty percent (40%) of the Adjusted Gross Advertising Revenues received by Licensee and shall remit sixty percent (60%) of such Adjusted Gross Advertising Revenues to Licensor. With respect to the exhibition of Content pursuant to subsections 1(b) and 1(c) above, Licensee shall remit to Licensor sixty percent (60%) of Adjusted Gross Advertising Revenues. Adjusted Gross Advertising Revenues shall mean all advertising revenues received by Licensee or its subdistributors, representatives or agents, as applicable, with respect to advertisements sold against the Content, less ad agency commissions and fees charged by advertising representatives associated with the sale and display of advertisements against the Content, which amounts shall, in the aggregate, in no event exceed forty percent (40%) of gross ad revenues. 7.2 License Fees. In the event Licensee authorizes the exhibition of Content in exchange for a license fee rather than on a revenue share basis, Licensee shall remit to Licensor one hundred percent (100%) of all such license fees received by Licensee from its subdistributors with respect to the Content (including any flat fees or other license fees paid to Licensee by third parties for exhibition of the Content on a Free-On-Demand basis to the extent such fees are not calculated as a share of advertising revenues). For the avoidance of doubt, to the extent Licensee and a subdistributor characterize a share of advertising revenues paid to Licensee for the right to exhibit the Content as a license fee, such revenues shall be included in Adjusted Gross Advertising Revenues pursuant to Section 7.1 for the purposes of determining the amount payable to Licensor by Licensee pursuant to this Agreement. 7.3 All payments due to Licensor hereunder shall be made in U.S. Dollars within 45 days of the end of the quarter in which the payment obligation is incurred and shall be made by wire transfer to: Sony Pictures Television
Page 4 C/O Chase Manhattan Bank New York 4 Chase Metrotech Center Brooklyn, NY 11245 ABA #021-000-021 Account Number # 304-192-791 Reference: Crackle FOD - LatAm 7.4 On a monthly basis, Licensee shall provide Licensor such reports as are reasonably necessary to track the performance of Content exhibited hereunder and the payment of amounts owing in connection therewith. The parties shall mutually agree on the content and scope of such reports. It is anticipated that the reports provided by Licensee will be comprised of streams by week by MPM/Walker number. 8. Promotion. Licensee shall have the right to use or authorize the use of written summaries, extracts, synopses, photographs, logos, key art, metadata, clips and trailers prepared and provided or made available by Licensor or, if not provided by Licensor, approved in writing in advance by Licensor ( Advertising Materials ), solely for the purpose of advertising, promoting and publicizing the exhibition and availability of the Content, and the services where Content is made available, hereunder. Notwithstanding the foregoing, unless Licensor specifies otherwise, Licensee shall not promote the availability of any particular piece of Content (i) more than 30 days prior to such Content s Availability Date or (ii) after the end of such Content s License Period. Licensee shall fully comply with (i) any and all instructions furnished in writing to Licensee with respect to the Advertising Materials (including size, prominence and position of Advertising Materials) and (ii) any and all restrictions or regulations of any applicable guild or union and any third party contractual provisions with respect to the advertising and billing of the Content as Licensor may advise Licensee. 9. Security; Geofiltering. Licensee shall implement and require its subdistributors to implement reasonably effective geofiltering measures designed to restrict the availability of Content to the Territory. Licensee shall also implement and require its subdistributors to implement those content protection measures (including, without limitation, digital rights management and geofiltering) specified by Licensor from time to time during the Term. 10. Withdrawal. Licensor shall have the right to withdraw any Program and related materials made available hereunder for any reason. Licensee shall cease and cause its subdistributors to cease making each such withdrawn Program available and shall cease to promote such Program s availability as soon as reasonably practicable after written notice from Licensor. 11. Assignment. Licensee shall not assign, transfer or hypothecate its rights hereunder, in whole or in part, whether voluntarily or by operation of law (including, without limitation, by merger, consolidation or change in control), without Licensor s prior written approval. 12. Entire Understanding. This Agreement includes the entire understanding of the parties with respect to the subject matter hereof, and all prior agreements (written or oral) with respect to such subject matter have been merged herein.
Page 5 This letter will serve as a binding agreement unless and until the execution of a more formal agreement that contains such terms and conditions as may mutually agreed upon by the parties, negotiating in good faith. Please confirm your acceptance of the foregoing by signing in the space provided below. Very truly yours, CPT HOLDINGS, INC. ( Licensor ) By: Name: Title: ACCEPTED AND AGREED: CRACKLE, INC. ( Licensee ) By: Name: Title:
Exhibit 1 Categories of Content Minisodes Television Episodes/Series Feature Films Made-For-Internet/Originals Promotional Clips